Jobless Claims Drop to 400,000

The number of people initiating claims for unemployment insurance fell last week, but still remained twice as high as it was before the recession began in February of 2020.

First-time claims for unemployment benefits dropped to 400,000 in the week through July 24, a decline of 24,000 from the previous week’s revised level, according to seasonally adjusted data released Thursday by the Labor Department. The decrease was a disappointment as economists were expecting a larger drop, according to a consensus estimate of 371,583 cited by Moody’s Analytics.

The downward movement brought weekly claims closer to their pandemic-era low of 368,000, hit twice this summer. Still, progress toward the pre-pandemic level of 210,000 has stalled in recent weeks, with claims hovering around the 400,000 mark since mid-May. The slow movement comes in contrast to momentum built in the spring, when the weekly volume of claims dropped by half after being stuck at four times that pre-pandemic level or higher for a year.

The job market is still on track to fully recover over the next year, Moody’s Analytics senior director Ryan Sweet wrote in a commentary Thursday. But he cautioned that cold weather, the pandemic, and vaccine hesitancy could prevent consumers from spending, delaying the recovery some.

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